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Income Tax Appellate Tribunal, DELHI BENCH ‘F’ NEW DELHI
Before: SHRI I.C. SUDHIR & SHRI L.P. SAHU
ORDER
Per L.P. Sahu, Accountant Member:
This is an appeal by the assessee against the order of ld. CIT(A), Ghaziabad dated 30.11.2015 for the assessment year 2007-08 on the following grounds :
“1. The appellant is a farmer and was not fully aware of income tax provisions. 2. Appellant has sold his agriculture land on 16.03.07 for Rs.1,50,00,000/- (One crore Fifty lacs only) and Ld. ITO 1(3) Ghaziabad has determined LTCG of Rs.10088205/-.
Appellant has constructed a residential house by investing Rs.10632000/- before 31.03.08 and was entitled for deduction u/s. 54F. Appellant was sick during the course of assessment and could not attend and claim the deduction before AO. Hence deduction u/s. 54F was not allowed by A.O.
4. Aggrieved by the order of AO assessee submitted his medical certificate and application u/r 46A of the Income tax Act before CIT(Appeals) and prayed to accept the additional evidence of construction of residential but Hon’ble CIT(Appeals) did not accept the additional evidence which is wrong and bad in law. CIT(Appeals) has mentioned in his order [page 4 para 1) that additional evidence can be received by the appellate authority but he did not accepted the additional evidence. 5. Appellant is entitled for deduction of Rs.10632000 u/s. 54F for construction of residential house property. In this regard Valuation report of the residential house was also submitted before CIT(Appeals) but appeal was wrongly rejected by the CIT(Appeals). Under the facts and circumstances of the case, your honour is requested to allow deduction for investment of Rs.10632000/- u/s. 54F and justice restored.”
The brief facts of the case are that the notice was issued u/s. 148 on 25.03.2013 which was duly served upon the assessee on 30.03.2013, but the assessee neither appeared before the AO nor filed any return of income in response to said notice. Notice u/s. 142(1) was also issued on 02.08.2013 which was not responded to. Thereafter several notices were issued to the assessee, but the assessee did not bother to appear before the AO, as can be seen from the series of notices mentioned in the assessment order. Ultimately, the AO issued notice u/s. 144 on 06.11.2013 fixing the date for compliance as 12.12.2013. No reply was submitted by the assessee. The last opportunity was further granted by AO by issuing notice for compliance on 13.01.2014, but all in futility.
3. The Assessing Officer obtained sale deed of the property from sub- Registrar, Ghaziabad and it was noticed by the AO that the assessee has sold a property on 16.03.2007 for a consideration of Rs.3.00 crores, in which the assessee’s ½ share comes to Rs.1.5 crore. The circle rate of the property was Rs.9,000/- per sq. meter. The plot was measured as 1091.51 sq. meter. The total cost as per circle rate comes to Rs.98,23,590/- and the assessee’s ½ share comes to Rs.49,11,795/-. Thus, the Assessing Officer calculated long- term capital gains at Rs.1,88,00,205/- (1,50,00,000 – 49,11,795). The stamp duty was paid by the assessee for Rs.30 lacs on the sale consideration of the above property. The Assessing Officer did not give deduction of stamp duty paid by the assessee on the sale consideration of the above property as provided u/s. 48(i) of the IT Act, 1961 and determined the capital gain. Aggrieved by the order of the Assessing Officer, the assessee appealed before the first appellate authority and submitted additional evidence u/r. 46A of the Income-tax Rules and prayed for admission of the same. The assessee submitted a medical certificate which was issued by Kailash Medicare & Research Centre, 13-Prem Enclave, Meerut Road, Opp. DPS, Ghaziabad (U.P.). The assessee produced a valuation report for the construction of a house of Rs.1,06,32,000/- from the registered valuer for claiming deduction u/s. 54F of the IT Act. The ld. CIT(A) did not accept the additional evidences and upheld the order of Assessing Officer stating that there was no claim made before the Assessing Officer u/s. 54F. Aggrieved by the order of ld. CIT(A), the assessee is in appeal before the Tribunal.
During the course of hearing, the ld. AR of the assessee submitted additional grounds before us, which speak the same thing as in original grounds. We, therefore, need not to adjudicate them separately. It was submitted by the ld. AR that the assessee was not aware of the notices issued by the AO due to his sickness and that he is an aged person. The AO has not given proper opportunity to defend the action taken u/s. 147/148 of the Act. It was submitted that the ld. CIT(A) was not justified to reject the additional evidences furnished in the shape of medical certificate and valuation report in support of assessee’s claim u/s. 54F of the Act.
The ld. DR vehemently objected the additional evidences submitted by the ld. AR. He submitted that ample opportunities had been given to the assessee. However, not to speak of furnishing any reply/evidence before the AO, he even did not bother to appear before the AO in compliance to various statutory notice issued by AO. Therefore, the ld. CIT(A) was quite justified to reject the additional evidences submitted as noted above, as the assessee did not fulfill the conditions of Rule 46A of the IT Rules. It was submitted that several notices were served upon the assessee, hence, the stand of assessee about unawareness of such notices is not believable. Reliance is placed on the decision of Bombay High Court in Smt. Prabha Vati vs. CIT, 231 ITR 1 and Gauhati High Court in CIT vs. Ranjit Kumar Choudhary, 288 ITR 179.
We have considered the rival submissions and have also gone through the entire material available on record before us. The grievance of the assessee in this appeal is based on the stand that the ld. CIT(A) was not justified not to admit the additional evidences laid before him u/r. 46A, as the assessee was not afforded reasonable opportunity of hearing before the AO and the assessee was not aware of the notices issued by AO due to his sickness during the assessment proceedings and therefore, the assessee could not place his stand before the AO. Having gone through the provisions of Rule 46A, we find that assessee is entitled to submit additional evidence before the first appellate authority only when it satisfies any of the four conditions enumerated in this rule which are as under : (i) if the Assessing Officer refuses to admit the evidence which ought to have been admitted; (ii). When the appellant was prevented by sufficient cause from producing such evidence which he was called upon to produce by the Assessing Officer; (iii). Where the appellant was prevented by sufficient cause from producing before the Assessing Officer any evidence which is relevant to any ground of appeal and (iv). When no sufficient /reasonable opportunity of hearing to the appellant was given to adduce any relevant evidence by the Assessing Officer at the time of passing the order impugned.
7. Admittedly, the first condition is not applicable in the facts of the present case. The contention of assessee regarding other three conditions is also not acceptable as we do not find any reasonable cause which prevented the assessee to appear and adduce the evidence before the AO. The assessee has laid emphasis on the medical certificate placed before the first appellate authority copy of which is also placed before us. This certificate certifies the ailment of assessee from 10.01.2014 to 10.02.2014, whereas the notice u/s. 148 was served upon the assessee on 30.03.2013, as mentioned in the assessment order itself. On this date the assessee was not ill and could appear before the AO, but he did not do so. Not only this, before the date of commencement of assessee’s ailment, i.e., 10.01.2014 as certified in medical certificate, 4-5 notices u/s. 142(1) had also been issued to the assessee, but he did not bother to respond. Besides, the assessment order has been finalized on 17.02.2014 and the assessee was recovered from illness on 10.02.14, but he still did not approach the AO thereafter upto the date of finalization of assessment order. We, therefore, find that there was no sufficient cause which prevented the assessee to put his claim before the AO or to adduce supporting documents. As regards lack of opportunity of being heard, we do not agree with the assessee inasmuch as the assessee has been given more than ample opportunities by the AO before finalization of assessment order, but the assessee has failed to avail any of the opportunity for which no good reason have been assigned before us, as discussed above. We, therefore, hold that exceptions set out in rule 46A of the Act under which the assessee could file the additional evidences, do not stand satisfied in the instant case.